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Despite reaching record highs of almost $74,000 on Thursday (March 14), the price of Bitcoin (BTC) dropped by 9% early on Friday (March 15) to $66, 885.<\/span><\/p>\n Many cryptocurrency traders will likely sell some of their Bitcoin holdings to cash in on the substantial 175% price increase over the past year. This profit-taking will be a contributing factor to the Bitcoin drop.<\/span><\/p>\n City Index analyst Matt Simpson told Sky News<\/a>: \u201cBitcoin has an established history of getting volatile and ruthless after hitting a record high. And not only did it recently hit a new high, but it looks like the Federal Reserve won\u2019t be as dovish as traders had hoped.\u201d<\/span><\/p>\n Analysts speaking to Coindesk echoed this sentiment<\/a>. \u201cThe recent surge in bitcoin prices has been too fast for the market to price correctly, so the current correction is expected,\u201d Greta Yuan, Head of Research at VDX, a Hong Kong-licensed exchange said.<\/span><\/p>\n A further complicating factor is the upcoming Bitcoin \u201chalving<\/a>\u201d, which happens every four years and is due in April. During the halving, the number of new Bitcoins being made available will be permanently halved. After this point, just 450 BTC a day will enter the market.<\/span><\/p>\n Why is this significant? First and foremost it helps maintain and control Bitcoin\u2019s fixed supply and the digital asset\u2019s inflation rate over time. This escalating scarcity is part of why Bitcoin is valuable, however, there\u2019s no evidence previous Halvings have caused the price to rise, which adds to the current uncertainty.<\/p>\n On top of this, the United States recently approved spot Bitcoin exchange-traded funds<\/a> (ETF), which have seen huge volumes of capital passing through since their launch. The largest Bitcoin ETF is run by BlackRock with $15.5 billion flowing into the fund in the two months since its launch.<\/span><\/p>\n \u201cThe historical trading volume of Blackrock\u2019s Bitcoin ETF has caused some unease in the market,\u201d said Adrian Wang, founder and CEO of Metalpha in an interview with Coindesk, \u201cwith some stakeholders fearing that Bitcoin\u2019s price will surge too much too soon and could experience a flash crash,\u201d Wang said.<\/span><\/p>\nWhat will happen when Bitcoin halves?<\/h2>\n